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Base Rate Predictions

homer_j_3
homer_j_3 Posts: 3,266 Forumite
in Mortgages & endowments
I am not asking for mystic meg predictions but just opinions and reasoning.

What do you think Base rate will be in

12 months

2 yrs

3 yrs

5 yrs

10 yrs

This thread should not be used as a platform for HPC discussions, just looking for opinions on where the MPC goes from here.
I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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Comments

  • Gorgeous_George
    Gorgeous_George Posts: 7,964 Forumite
    Part of the Furniture Combo Breaker
    12 months - 4.50% (3 x 25 points cuts. One each for the wise monkeys, GB/AD/MK, as they attempt to stabilise the economy)

    2 yrs - Rising from 4.25% as election fever erodes, the Tories are back and rates are on the way up towards 6.50%

    3 yrs - Still got the Tories in. Rates rising to 8.0%

    5 yrs - Yep, rising to 9.5%

    10 yrs - Now had a good spell of Tory rule and rates are back at the Tory norm of 10%+


    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • dunstonh
    dunstonh Posts: 120,351 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    oh crystal ball what do you tell me.... ;)

    12 months - 4.5%

    2 yrs - 5%

    3 yrs - 5.5%

    5 yrs - 7%

    10 yrs - +/- 2% on above depending on whether Asia is hogging all the resources or not.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • free4440273
    free4440273 Posts: 38,438 Forumite
    12 months: 4%

    2 yrs: 5.25%

    3 yrs: 5.25%

    5 yrs: 6/7%

    10 yrs: 6/7% ?????
    (and next week? .25 cut)
    BLOODBATH IN THE EVENING THEN? :shocked: OR PERHAPS THE AFTERNOON? OR THE MORNING? OH, FORGET THIS MALARKEY!

    THE KILLERS :cool:

    THE PUNISHER :dance: MATURE CHEDDAR ADDICT:cool:
  • homer_j_3
    homer_j_3 Posts: 3,266 Forumite
    free4440273 wrote: »
    12 months: 4%

    2 yrs: 5.25%

    3 yrs: 5.25%

    5 yrs: 6/7%

    10 yrs: 6/7% ?????
    (and next week? .25 cut)

    Any reasoning behind why you think this?

    I guess I better put my predictions in..

    12 mths = 4.5 - 4.75% because they will be trying to balance inflation and the slowdown - Inflation will probably break 3% this year.

    24 mths = 4.75 - 5.25% because they will want to start bringing the rates back up to push inflation back down to nearer 2%

    36 mths = 5-7% - Not sure whether the tories plan to take the rate responsibility off the BOE. It wont be popular if they take the power off them and then set their rates at a record high.

    5 yrs plus - I have absolutely no idea
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • free4440273
    free4440273 Posts: 38,438 Forumite
    homer_j wrote: »
    Any reasoning behind why you think this?

    I guess I better put my predictions in..

    12 mths = 4.5 - 4.75% because they will be trying to balance inflation and the slowdown - Inflation will probably break 3% this year.

    24 mths = 4.75 - 5.25% because they will want to start bringing the rates back up to push inflation back down to nearer 2%

    36 mths = 5-7% - Not sure whether the tories plan to take the rate responsibility off the BOE. It wont be popular if they take the power off them and then set their rates at a record high.

    5 yrs plus - I have absolutely no idea
    Your predictions don't differ markedly from mine:confused:. Also, I'm not suggesting I'm correct in my predictions:
    Any reasoning behind why you think this?
    can you be more specific? which time-line?
    BLOODBATH IN THE EVENING THEN? :shocked: OR PERHAPS THE AFTERNOON? OR THE MORNING? OH, FORGET THIS MALARKEY!

    THE KILLERS :cool:

    THE PUNISHER :dance: MATURE CHEDDAR ADDICT:cool:
  • homer_j_3
    homer_j_3 Posts: 3,266 Forumite
    all of them lol
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • free4440273
    free4440273 Posts: 38,438 Forumite
    free4440273 wrote: »
    12 months: 4% (recession/deflation/house price collapse etc.

    2 yrs: 5.25% (balance inflation/house price deflation

    3 yrs: 5.25% (as above, but more worried about house price deflation

    5 yrs: 6/7% (back to the 'norm' :rolleyes:

    10 yrs: 6/7% ????? (:confused::rolleyes:

    (and next week? .25 cut) (bow to the stock market

    ^^^FAO Homer :)
    BLOODBATH IN THE EVENING THEN? :shocked: OR PERHAPS THE AFTERNOON? OR THE MORNING? OH, FORGET THIS MALARKEY!

    THE KILLERS :cool:

    THE PUNISHER :dance: MATURE CHEDDAR ADDICT:cool:
  • Arcaine
    Arcaine Posts: 309 Forumite
    Base rate will not change in March, they will be too worried about price increases and pay settlements for this year, otherwise they would fall to encourage more consumer spending to counteract any slowdown in the economy to keep GDP on target.

    Price changes in the energy and food sectors are a blip, caused by short supply in the case of food and speculation in the energy markets (unless we truly have reached peak oil). I think once people stop spending here and in America as attitudes change and peoples budgets become more stretched then prices should fall as demand drops off. After all raising prices when people are wanting to keep the money in their pocket is pretty much suicide for any business.

    So my predictions for interest rates are

    Hold until commodity prices stabalise. Then falling to 4 or 4.5 in the medium term as spending slows. Long term...:confused:, who knows....
    Please remember other opinions are available.
  • chriz1000
    chriz1000 Posts: 457 Forumite
    My optimistic predictions

    12 months - 4.25% - People still can’t afford repayments, more repossessions.

    2 yrs -3.5% - Election time, last ditch attempt to keep labour in power.

    3 yrs – 8% - Correction in rates, inflation now at 6%.

    5 yrs – 6% -This is when my fixed rate comes to an end so it will have to come down ;)

    10 yrs – 7% - Country getting back on track, mortgage companies start to lend out 90% mortgages again.
  • stoke_bishop
    stoke_bishop Posts: 70 Forumite
    Except Labour don't control the base rate, so a reduction at election time is not going to come from them!
    chriz1000 wrote: »
    My optimistic predictions

    12 months - 4.25% - People still can’t afford repayments, more repossessions.

    2 yrs -3.5% - Election time, last ditch attempt to keep labour in power.

    3 yrs – 8% - Correction in rates, inflation now at 6%.

    5 yrs – 6% -This is when my fixed rate comes to an end so it will have to come down ;)

    10 yrs – 7% - Country getting back on track, mortgage companies start to lend out 90% mortgages again.
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